Hello and welcome to CantosCharts. My name is James Hughes from spread betting firm CMC Markets.

Today we're going to look at the gold price. Now gold is of course always key, especially when we've got what we've got at the moment in terms of the risk on/risk off trade. It has been a real theme of these markets over the last few months or so and we've got that very much range trading and a lot of other instruments. When we get range trading and uncertainty in other markets we tend to get strength in the gold market. It uses that safe haven yet again.

So looking at the chart behind us you can really see how strong gold has been.

Now this takes us back quite a long way. It takes us back to October 2008. Now this is the key level where we started from this downside. This is a weekly chart, so that shows you just how strong gold has been.

I'm sure you don't need me to tell you just how strong it has been over these last couple of years or so. But from this low we can see that that this downside support trend line is still very much in place and to the levels that we've got at today. We are starting to see a little bit of a fall off over the last few weeks or so. Over the last four weeks we've seen a couple of aggressive falls followed by slightly better weeks and that's a key sign that this market may be turning a little bit. We've seen aggressive falls and then a slightly better week.

So again, it has not been that much of a turnaround. So we started to see this fall and we're coming down to that key trend line on the downside. So if we do get to that, again, that's where we're going to be looking for that to hold.

As we said yesterday, we talk about support and resistance and trend line support and resistance. How many times it has been tested and how long it has been in place shows just how strong it is. This has been in place since October 2008. It's been tested a number of times as well.

So it shows it is a real strong support line on the downside even though it is trend line support. So a move to the downside here. We're going to be looking for it to bounce off of that.

Now if we go in a little bit closer and look exactly what's been going on over the last few months or so, we can see that slowing down in the price.

Now of course, as we were talking before, this is now a daily chart, not the weekly chart. We've seen the market continue to go higher and then that period of sideways trading like we're getting in a lot of the markets at the moment.

We've got a key downside support level again at $1,176.50, so that's acting as our downside level. Again, testing a number of times. Started at the low point, pushed higher, but then those aggressive falls again have really left us into this situation where we're coming down to test that yet again. So we've seen the market come up, back down again, test those levels.

We've also got the moving averages on here. Now we've got 50, 100 and 200 day moving averages on this chart at the moment. As you can see, the 50 day moving average is the higher one. That is also acting as a bit of resistance on the upside.

So you can see that ever since the big fall lower that broke below that 50 day moving average we're now seeing that act as the topside just to really keep us out of the way. The market has been really tooing and froing over these last few sessions or so. You can see we're not necessarily pushing too much higher and we're not necessarily going much lower. So the 50-day is really reacting.

Since we come back through the 100-day again, that is now acting as our bit of resistance as well. So it's really tapering things into quite a small little channel in here and it's going to be interesting to see which way we do break out and that's what the market is waiting for at the moment in the gold price. Just to see which way we're going to break out and that could come down to anything to do with the fallout from the stress tests, the BP situation, the European sovereign debt. Mostly going to be looking at earnings and US data, though. That's probably going to be the key thing to look out for and we'll cover that a little bit more tomorrow when we look at the S&P. But at the moment we're seeing the gold price really start to be squeezed out a little bit. So it's going to interesting to see exactly what happens.

We've got the 200-day moving average, which is a little bit lower, and you can see the purple line that comes through is that weekly trend line support from October 2008 we were talking about.

So bringing it into this smaller scale shows you just how close we are to a lot of these big levels at the moment and it really puts gold on a bit of a knife-edge as to which way we are going to go next. A big push higher back through 100-day moving average, back through the 50 day moving average, then we're looking up at these highs yet again.

But a continued staying under these levels, a break maybe of that support and then a move back down to that trend line support is going to make investors that little bit more nervous as we get to the end and into the next few weeks on the gold price.

Thank you for listening. My name is James Hughes from CMC Markets. Join us tomorrow when we're going to be looking at some of the major indices, FTSE and the S&P.